Dirty Talking - A case for telecom to shift from diesel to renewable

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Publication - May 21, 2011

India is now the second largest of the global telecom markets and is projected to overtake China. The telecom industry has attracted eight per cent of the cumulative foreign direct investment (FDI) over the
last two years, with a cumulative flow of FDI worth USD 10.26 billion to the sector between April 2000 and January 2011. Indian telecommunication companies are now set to make a major impression globally. India’s telecom equipment manufacturing sector is also emerging as one of the largest in the world.

However, this growth has been, and continues to be, at the cost of the climate. In India, the sector has been continually reliant on diesel, and as a result is responsible for over 6 m tonnes of CO2 emissions from diesel generated power annually.

Energy is a dominant cost component for telecom companies. Currently, the sector requires fourteen billion units of electricity annually to power its network infrastructure, in order to provide uninterrupted service to its consumers . This is projected to grow to around twenty six billion units of electricity by 2012.

As telecom networks focus on sustaining growth and expansion into new markets and areas, they are increasingly troubled by the inadequacies of the power grids and risks of unexpected outages, sometimes of extended duration. While the current model of diesel- powered networks offers the sector short-term profits, such a model of operation is likely to limit growth and profit generation prospects of the sector in the long term.

The growing appetite for energy, the implications of climate change, ourcontinuing damage to the environment, plus the scarcity and increasing prices of fossil fuels, create the appropriate conditions to develop the sector’s use of renewable energy. For telecom operators, the benefits of a more proactive approach to carbon and energy-oriented management will be significant. The market is extremely competitive and open for movers. However, telecom companies are yet to integrate low energy and low carbon considerations across their operations and portfolio to any serious level.